- Charter Hall Group (CHC) will acquire a 50 per cent interest in Paradice Investment Management (PIM) under a binding sales agreement
- The acquisition price is $207 million and represents a net profit after tax multiple of 10, equating to 2.3 per cent of PIM’s funds under management
- PIM shareholders will receive payment in 70 per cent CHC shares and 30 per cent cash
- The company says the partnership is expected to be accretive to earnings
- Shares are trading 7.71 per cent lower at $19.95 per share
Charter Hall Group (CHC) has entered into a binding sales agreement with Paradice Investment Management (PIM) to acquire a 50 per cent interest.
The acquisition price for a 50 per cent investment is $207 million and represents a net profit after tax (NPAT) multiple of 10, equating to 2.3 per cent of PIM’s funds under management (FUM).
The transaction is expected to settle by December 31, 2021.
PIM shareholders will receive payment in 70 per cent CHC shares and 30 per cent cash used by PIM shareholders to fund tax obligations created from the sale.
Shares issued for payment represent 1.55 per cent of Charter Hall’s security on issue.
CHC will have the option to acquire the remaining 50 per cent interest of PIM in FY25, subject to confidential conditions.
All PIM employees will remain within the business, whilst the board will have three directors from CHC and three from PIM.
Managing Director David Harrison says the acquisition will be beneficial to CHC.
“This partnership represents a rare opportunity to invest in a large scale, high quality listed equities fund manager with $18.2 billion of funds under management (FUM) and a 20 year track record, building upon and significantly expanding our existing listed real estate equities business,” he said.
“It diversifies Charter Hall’s FUM and earning streams, introduces new client relationships to both businesses across wholesale and retail equity source segments.”
The company says the partnership will be accretive to earnings.
Shares were trading 7.72 per cent lower at $19.95 per share at 2.30 pm AEDT.